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Practice Perfect: Coding & Reimbursement
How to Fight a Denied Claim Under Medicare’s New Appeals Process
A new set of regulations has changed the way you contest a denied claim or dispute the result of a postpayment review. The new procedures, which largely went into effect in January, offer some advantages—if you know how to make the most of them.
According to Alan Reider, JD, an attorney for the Washington, D.C., law firm of Arent Fox, some of the changes to the process will be good for physicians; others not so good.
First level of appeal—redetermination of the denial. Under the new rules for Medicare Part B appeals, you have 120 days after the initial denial by the carrier to ask the carrier to make what is called a redetermination of the denial.
While you previously could make that request over the phone, you must now do it in writing. Unchanged from the previous procedures, however, is the fact that it is the carrier that first decides the redetermination. "That’s a waste of time, but you have no choice; you have to go through it," said Mr. Reider.
However, unlike the prior process, Mr. Reider points out that the carrier must now provide its reason for the denial in a more standardized way, stating, for instance, whether the denial is based on a local coverage determination (LCD) or a national coverage determination. This puts more of the burden of proof on the carrier, said Mr. Reider.
Second level of appeal—the Qualified Independent Contractor. It’s this second step in the appeals process where the significant changes occur. First of all, an employee of the carrier previously conducted the appeal of the carrier’s denial. "In the past, you’d first file an appeal and it got denied, and then you’d get a ‘fair hearing’ at the carrier," said Mr. Reider. "And that was an oxymoron."
Now, the second level of appeal is conducted by a Qualified Independent Contractor (QIC). As the name implies, the QIC is neither an employee of the carrier nor is he or she bound by the carrier’s policies.
Typically, to pursue the second level of appeal, the physician must submit a position paper as well as evidence stating why the physician believes the policies leading to denial are wrong. That must be done within 180 days.
This ties into another important change in the appeals process. Besides the fact that the QIC reviewers who handle the second-level appeal are no longer employees of the carrier, they also must have enough medical knowledge to pass judgment on the medical evidence you submit.
"Unlike in the past, you now have people with health care expertise," said Mr. Reider. "On the other hand, this level is conducted strictly ‘on the record’ with paper submissions. You can’t make an impassioned appeal and convince them with your oratory. You have to make your case in writing."
But most important, said Mr. Reider, is that this second level of appeal is now the last level at which you can submit new evidence to reinforce your case. "This forces the practice to say, ‘What I’m doing is consistent with the standard of practice,’" said Mr. Reider. "Or it means that you may be hanging out there on your own even if nobody else in your profession agrees with you. The point is, it forces the physician to have his or her ducks in a row and to ask if there is support from peers."
Third level of appeal—the Administrative Law Judge. If you fail at the second level of the process, you can go to the third level—the Administrative Law Judge (ALJ) Hearing. There, you can make new arguments, but no new evidence is allowed. Those new arguments must be based on the evidence you—and the carrier—submitted in the first two levels of appeal, said Mr. Reider.
Another noteworthy change is that the ALJ has been moved from the Social Security Administration to the Department of Health and Human Services, the federal agency that runs the Medicare program. The question of whether this will lead to a less independent process is currently the subject of debate.
Final levels of appeal. The last two levels remain the Medicare Appeals Board and the Federal District Court.
Defeat the Carrier’s Decision
Mr. Reider has battled carriers on two fronts—in some cases, he has argued that the carrier made a mistake on a substantive medical issue; in others, that the carrier failed to follow the correct process.
Arguments based on medical issues. When there is a disagreement over whether the carrier should pay for a particular service for a given indication, Mr. Reider recommends that you investigate whether there is anything in writing that indicates what the right answer ought to be.
As noted above, one of the most important changes at these first two levels of appeal relates to the requirement that the carrier must now provide the basis for its denial. Besides adding to the carrier’s burden of proof, it also clarifies matters for the physician. "If there’s a written policy out there, that’s a tremendous burden [for a medical practice] to overcome," he said. "If there is an LCD that goes against you, think about not appealing." Of course, if you disagree with the LCD or other policies cited by the carrier and have documentation, such as peer reviewed journal articles, to support your position, you may still find it advantageous to appeal.
One trick that you can employ at the first denial, Mr. Reider noted, is to contact the patient and see what reasons were given to him or her for the denial. That’s because there are different standards in the new laws about what information goes to the patient and what goes to the physician. Your patient may actually have information that can help you in the appeal process, he said.
As noted previously, the evidence you submit can come in the form of peer reviewed journal articles, or affidavits from experts who dispute the articulated policy and contend that the procedure in question is medically necessary and appropriate.
It also can be worthwhile to find out how similar procedures are handled in other parts of the country. "The easiest way of overturning an LCD is to show this particular carrier is the only one [that denies a specific procedure]," said Mr. Reider. "If you can show there are a dozen other carriers with LCDs that support your position, that’s another good reason to pursue the appeal."
Since both the physician and the carrier must submit all their evidence earlier in the process, it is important to do your homework early, warned Mr. Reider. That’s particularly true if you disagree with the policies and want to be reimbursed for a procedure that is not currently deemed to be reimbursable.
Arguments based on procedural issues. Mr. Reider also suggests three possible ways to argue that the carrier made a procedural error.
The Bottom Line
You should determine early whether it is worth your while to go through the appeals process. "Often, a physician will say, ‘I am not going to spend $15,000 pursuing an appeal for $1,000,’" Mr. Reider noted. "But it’s not just an issue of this one case. It’s the value of all the procedures for the next few years."
In summary, the most important thing you can do to avoid and defeat carriers’ denials is to implement sound claim procedures and documentation standards and to know when and what kind of evidence to submit.